We provide a full range of outsourced accounting services to our clients – everything from routine data entry and information retrieval, to state-of-the-art accounting software and sophisticated analytics, all provided within a structured fee schedule. We ensure that all required government filings are completed accurately and on time.
Outsourcing your daily accounting functions eliminates the disruption during times of staff absences and turnover. Our outsourcing arrangement is cost effective and allows you to access the level of accounting services that you need, allowing you to focus on delivering your mission and serving clients.
What is included in Financial Reporting for Nonprofits?
Financial reporting is a critical aspect of nonprofit organizations as it provides transparency, accountability, and demonstrates the responsible use of funds. Nonprofits are obligated to provide accurate and comprehensive financial reports to stakeholders, including donors, grantors, board members, and regulatory authorities. This page outlines the key elements of financial reporting for nonprofits.
- Purpose of Financial Reporting: Financial reporting serves multiple purposes for nonprofits. First, it helps stakeholders assess the financial health and sustainability of the organization. Second, it aids in decision-making by providing relevant financial information to support strategic planning and resource allocation. Finally, financial reports enable nonprofits to comply with legal and regulatory requirements.
- US Generally Accepted Accounting Principles (GAAP): Nonprofits follow specific accounting principles to ensure consistency and comparability in financial reporting. We are experts in providing nonprofit accounting services recorded on a GAAP basis.
- Key Internal Financial Statements and Management Reporting: Nonprofit financial reporting typically include the following financial statements:
- Statement of Activities: This statement provides a summary of the organization’s revenues, expenses, gains, and losses including donor restricted activity over a specific period. It demonstrates whether the organization generated a surplus or incurred a deficit during that period.
- Statement of Financial Position (Balance Sheet): The Statement of Financial Position presents a snapshot of the organization’s financial position at a specific point in time. It reports the organization’s assets (such as cash, investments, property, and equipment), liabilities (such as loans and accounts payable), and net assets (the difference between assets and liabilities).
- Cash Flow Statement: This statement tracks the organization’s cash inflows and outflows during a specific period, categorizing them into operating, investing, and financing activities. It provides insights into the organization’s liquidity and cash management.
- Budget vs. Actual Statement: This statement demonstrates the Board approved budget compared to the actual activity for the defined period of time. A variance analysis of this comparison provides insight into actual performance of the organization. The budget demonstrates the organizations financial plan for the period and the actual represents results.
- Management Discussion and Analysis: Nonprofit financial reports are often accompanied by detailed notes that provide additional information and disclosures. They offer clarity and context to the financial statements, helping stakeholders better understand the organization’s financial position and performance.
- Financial reporting often includes comparative analysis, where the current year’s financial statements are compared with previous years’ statements. This analysis helps identify trends, patterns, and changes in financial performance over time. Financial ratios may also be calculated to assess liquidity, efficiency, and financial sustainability.
- Restricted Donation and Grant Reporting: Nonprofits must accurately report grants, and restricted funds. Restricted reporting involves providing details on contributions received, donor restrictions, and any conditions attached to the funds. Grant reporting entails demonstrating compliance with grant requirements, tracking expenses, and providing reports on the use of grant funds.
- Monthly Operational Reports. Financial One will provide monthly reports to your management team to assist them in operating the organization. These reports may be provided by program, location, functional or other breakdown, depending on the client need.
- Independent Audit or Review: Most nonprofits typically engage external auditors to conduct an independent examination of their financial statements. The audit provides assurance to stakeholders regarding the accuracy and reliability of the financial reports. With over 100 years of combined former audit and public accounting experience, Financial One is well positioned to prepare all documents required by the auditors and supports the audit process through the issuance of the final audit report.
- Compliance with Regulatory Requirements: Nonprofits must comply with specific regulatory requirements governing financial reporting. This may include filing annual reports with government agencies, such as the Internal Revenue Service (IRS) in the United States, and adhering to local, state, or national nonprofit laws and regulations. Financial One is able to prepare these reports or assist the auditors with the preparation of these reports.
- Stakeholder Communication: Financial reports are distributed to various stakeholders, including board members, donors, grantors, and the public. Financial One can tailor these reports to suit your needs.
Accounting for Nonprofit Organizations FAQs
Nonprofit organizations have unique challenges and a need for accurate and timely financial information. Explore our nonprofit accounting FAQs to learn more about why every nonprofit should use a specialized accounting firm.
No. Financial One becomes part of your team to provide the appropriate level of accounting resources that you need. We provide a team of fractional FTE’s with the required knowledge, skills and abilities to ensure segregation of duties while meeting the level of expertise needed to effectively complete the task.
Yes. Financial One provides special project services ranging from turnaround services, CFO engagements (long and short term), financial and human resources department reviews, and other operational analysis with financial and human resources related impact.
No. Financial One is able to provide all services from its offices, unless there is a specific need for team members to be on site.
Financial One supports client events and participates in activities that strengthen the communities in the areas we serve.